ADMINISTRATIVE PROCEEDING BEFORE THE SECURITIES COMMISSIONER OF MARYLAND

Transcription

1 ADMINISTRATIVE PROCEEDING BEFORE THE SECURITIES COMMISSIONER OF MARYLAND IN THE MATTER OF: * FCE INVESTMENTS.COM, * FIRST CASH EXPRESS, INC. * (dba FIRSTCASHEXPRESS.com), * Securities Division No and * ALVIN A. AMBROSE, * RESPONDENTS. * * * * * * * * SUMMARY ORDER TO CEASE AND DESIST WHEREAS, the Securities Division of the Office of the Maryland Attorney General, pursuant to the authority granted in section of the Maryland Securities Act, Title 11, Corporations and Associations Article, Annotated Code of Maryland (1999 Repl. Vol. & Supp. 2006) (the "Securities Act"), undertook an investigation into the securities-related activities of FCE Investments.com, First Cash Express, Inc. (dba FirstCashExpress.com) and Alvin A. Ambrose (collectively the Respondents ); and WHEREAS, on the basis of that investigation the Securities Commissioner (the Commissioner ) has determined that the Respondents have engaged and may continue to engage in an act or practice constituting a violation of the registration and antifraud provisions of the Securities Act; and WHEREAS, the Commissioner has determined that immediate action against the Respondents is in the public interest;

2 NOW THEREFORE, pursuant to section (a) of the Securities Act, it is hereby: ORDERED, that FCE investments.com, First Cash Express, Inc. and Alvin A. Ambrose, their affiliates, officers, directors, employees, agents and anyone else involved in the offer or sale of investments in or through the Respondents, immediately cease and desist from soliciting investment in, or offering or selling securities in the form of promissory notes or other investments in a pool used to fund personal and payday loans in or from Maryland, pending a hearing in this matter or until such time as the Commissioner modifies or rescinds this Order. Willful violation of this Order is punishable as a criminal offense under section of the Securities Act by a fine not exceeding $50,000 or imprisonment not exceeding three years, or both. IT IS FURTHER ORDERED that each Respondent show cause why a final order should not be issued against it, assessing that Respondent the statutory penalty of $5,000 per violation of the Securities Act, and permanently barring that Respondent from engaging in the securities business in or from Maryland. I. JURISDICTION 1. The Commissioner has jurisdiction in this proceeding pursuant to section of the Securities Act. II. RESPONDENTS 2. FCE Investments.com ( FCE Investments ) holds itself out as engaged in the business of funding the payday loan program of its parent FirstCashExpress.com ( FirstCashExpress ). It uses an address of P.O. Box 5001, Laytonsville, MD FCE Investments does not appear to be incorporated and is not licensed to do business in Maryland. -2-

3 4. FirstCashExpress appears to be a trade name for First Cash Express, Inc. ( First Cash Express ). 5. First Cash Express was incorporated in Nevada on about March 2, It is not licensed to do business in Maryland. 6. Alvin A Ambrose ( Ambrose ) is the President, Secretary, Treasurer and sole Director of First Cash Express. 7. Ambrose resides in Clarksville, Maryland. III. STATEMENT OF FACTS On information and belief, the Commissioner alleges the following as the basis for this Order. 8. FCE Investment solicits investors through the internet. It is also the subject of numerous internet chat rooms. 9. FCE Investments describes itself as the entity that pools investment funds to provide cash advances for First Cash Express. FCE Investments, the website claims, is able to offer a high return to investors because it makes short term loans of 7 to 14 days to its First Cash Express clients at 15% interest plus a $25 application fee. 10. FCE Investments offers new investors a return of 15% a month on a minimum investment of $20,000. After June 7, 2007, the rate of return will fall to 5% a month. The investment term is between one and five years. Interest is paid on a monthly basis. 11. Potential investors are advised that they must pay with cashiers checks or cash. 12. The website reassures potential investors that the investment is safe because the cash advance industry has enjoyed steady growth. The website quotes a happy investor as saying It s just -3-

4 like planting a Money Tree! 13. FCE Investments website claims that the investment is legal because First Cash Express is licensed to offer personal loans. First Cash Express, however, is not licensed with the Maryland Department of Labor, Licensing and Regulation, as it must be in order to offer consumer loans from Maryland. Moreover, the payday loan program is not legal in Maryland because the interest charged borrowers violates Maryland law. 14. The website states that FirstCashExpress/FCE Investments has been in business since January 1, In fact, First Cash Express, Inc. was not formed in Nevada until March 2, The investments in FCE Investments that have been offered and sold by the Respondents are "securities" within the meaning of section of the Securities Act. 16. The Securities Division has no record of securities registration for an offering by or in the name of FCE Investments.com, FCE Investments or FirstCashExpress/FCE Investments, nor has any claim of exemption or status as a federal-covered security been made with the Division with respect to any such offering. 17. FCE Investments.com and First Cash Express, Inc. are not registered in Maryland as a securities broker-dealer or as an investment adviser. 18. Ambrose is not registered in Maryland as a securities broker-dealer or as an agent, or as an investment adviser or investment adviser representative. COUNT I (Offer and Sale of Unregistered Securities) WHEREAS, section of the Securities Act makes it unlawful for any person to offer or sell a security in this state unless the security is registered, is exempt from registration under the Act, or is a federal covered security; and -4-

5 WHEREAS, the investments in FCE Investments.com and First Cash Express, Inc. that have been offered and sold by the Respondents are "securities" within the meaning of section of the Securities Act; and WHEREAS, there is no record of registration, a claim of exemption from registration, or qualification as a federal covered security filed with the Division by or on behalf of FCE Investments.com or First Cash Express, Inc.; and WHEREAS, Respondents have offered and sold securities in violation of the registration requirements of section of the Securities Act; NOW, THEREFORE, IT IS HEREBY ORDERED that Respondents, their officers, directors, employees, agents and anyone else involved in the offer or sale of the FCE Investments.com or First Cash Express, Inc. securities, cease and desist from offering and selling securities in or from Maryland, pending a hearing in this matter or until such time as the Commissioner modifies or rescinds this Order. Willful violation of this Order could result in criminal penalties under section of the Securities Act. IT IS FURTHER ORDERED that Respondents show cause why a final order should not be issued against them, assessing Respondents the statutory penalty of $5,000 per violation of section , and permanently barring Respondents from the securities business in Maryland. COUNT II (Unregistered Broker-Dealer and/or Agent) WHEREAS, section of the Securities Act makes it unlawful for any person to transact business in the offer and sale of securities in this state as a broker-dealer or agent unless that person is registered as such pursuant to the Securities Act; and -5-

6 WHEREAS, the investments in FCE Investments.com or First Cash Express, Inc. that have been offered and sold by the Respondents are "securities" within the meaning of section of the Securities Act; and WHEREAS, the Securities Act defines "broker-dealer" to mean a person engaged in the business of effecting transactions in securities for the account of others or for his own account; and WHEREAS, the Securities Act defines agent to mean an individual other than a brokerdealer who represents a broker-dealer or issuer in effecting or attempting to effect the purchase or sale of securities; and WHEREAS, Ambrose acted as a broker-dealer or agent of FCE Investments.com or First Cash Express, Inc. and engaged in effecting transactions in securities in the form of promissory note or investment contract securities in this state; and WHEREAS, FCE Investments.com and First Cash Express, Inc. acted as a broker-dealer and engaged in effecting transactions in securities in the form of promissory note or investment contract securities in this state; and WHEREAS, Ambrose is not registered with the Division as a broker-dealer or an agent to transact securities business within this state; and WHEREAS, FCE Investments.com and First Cash Express, Inc. are not registered with the Division as a broker-dealer to transact securities business within this state; NOW, THEREFORE, IT IS HEREBY ORDERED that Respondents, their officers, directors, employees, agents and anyone else involved in the offer or sale of the FCE Investments.com and First Cash Express, Inc. securities, cease and desist from acting as brokerdealers or agents in this state pending a hearing in this matter or until such time as the Commissioner -6-

7 modifies or rescinds this Order. Willful violation of this Order could result in criminal penalties under section of the Securities Act. IT IS FURTHER ORDERED that Respondents each show cause why a final order should not be issued against it, assessing that Respondent the statutory penalty of $5,000 per violation of the section broker-dealer and agent registration provisions, and permanently barring that Respondent from the securities business in Maryland. COUNT III (Material Misrepresentation or Omission in Sale of Securities) WHEREAS, section of the Securities Act prohibits any person, in connection with the offer, sale or purchase of any security, directly or indirectly to: (1) employ any device, scheme or artifice to defraud; (2) make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading; or (3) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit on any person; and WHEREAS, the investments in FCE Investments.com and First Cash Express, Inc. that have been offered or sold by the Respondents are "securities" within the meaning of section of the Securities Act; and WHEREAS, in connection with the offer and sale of the FCE Investments.com and First Cash Express, Inc. securities, the Respondents misrepresented material facts or omitted material facts that were necessary to make statements that were made not misleading, including Respondents representation concerning the required registration, accurate representation of the company s history and legal status, and disclosure concerning the risks associated with an investment in FCE Investments.com and First Cash Express, Inc.; -7-

8 NOW, THEREFORE, IT IS HEREBY ORDERED that Respondents, their officers, directors, employees, agents and anyone else involved in the offer or sale of the FCE Investments.com and First Cash Express, Inc. securities, cease and desist from engaging in misrepresentation in connection with the offer or sale of securities, in violation of section of the Securities Act, pending a hearing in this matter or until such time as the Commissioner modifies or rescinds this Order. Willful violation of this Order could result in criminal penalties under section of the Securities Act. IT IS FURTHER ORDERED that Respondents show cause why a final order should not be issued against them, assessing Respondents the statutory penalty of $5,000 per violation of section , and permanently barring Respondents from the securities business in Maryland. REQUIREMENT OF ANSWER AND NOTICE OF OPPORTUNITY FOR HEARING IT IS FURTHER ORDERED, pursuant to section of the Securities Act and the Code of Maryland Regulations ( COMAR ) , that each Respondent shall file with the Securities Commissioner a written Answer to this Order within fifteen days of service of the Order. The Answer shall admit or deny each factual allegation in the Order and shall set forth affirmative defenses, if any. A Respondent without knowledge or information sufficient to form a belief as to the truth of an allegation shall so state. The Answer also shall indicate whether the Respondent requests a hearing. A hearing will be scheduled in this matter if one is requested in writing. Failure by any Respondent to file a written request for a hearing in this matter shall be deemed a waiver by that Respondent of the right to such a hearing. -8-

9 Failure of a Respondent to file an Answer or a request for a hearing shall result in entry of a final order directing that Respondent permanently to cease and desist from violation of the Securities Act, and imposing the sanctions sought in this Order. SO ORDERED: 6/5, 2007 /S/ MELANIE SENTER LUBIN SECURITIES COMMISSIONER -9-

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